Minister of Industry Denies Indonesia is Experiencing Deindustrialization, Here's the Explanation

Minister of Industry Agus Gumiwang Kartasasmita (Photo: dock. Antara)

JAKARTA - Minister of Industry (Menperin) Agus Gumiwang Kartasasmita denies that Indonesia is experiencing deindustrialization.

Minister of Industry Agus assessed that the business climate in Indonesia is still conducive because it is reflected in the increasingly active manufacturing industry activities, even in the midst of a slowing global economy.

According to Agus, consistently, the contribution of the manufacturing industry sector to national Gross Domestic Product (GDP) is still the highest. For example, in the third quarter of 2023 it will contribute up to 18.75 percent.

"This means that the manufacturing industry still plays an important role in supporting national economic growth," he said in his written statement, quoted Thursday, December 14.

Agus added that the processing industry also grew by 5.20 percent in the third quarter of 2023 on an annual basis or year on year (yoy), exceeding economic growth which reached 4.94 percent in the same period.

"In fact, if you look at investment data in Indonesia, the manufacturing industry contributes up to 40 percent. Furthermore, the manufacturing industry's contribution to national exports reaches 73 percent," he added.

Therefore, Agus emphasized that Indonesia is not experiencing deindustrialization.

"I also want to convey other data that strengthens that Indonesia is experiencing expansion in its manufacturing industrial sector, namely the results of the Industrial Confidence Index (IKI) released by the Ministry of Industry in November 2023, showing a figure of 52.43 or an increase of 1.73 points compared to October 2023, " he said.

In the future, Agus continued, the Ministry of Industry is committed together with other relevant stakeholders to create a strong and sustainable national industry.

For example, this effort involves implementing practices that promote the concept of Environmental, Social, Corporate Governance or Environmental, Social, Governance (ESG). Because, this step is one of the key factors in achieving the Sustainable Development Goals (SDGs).

By developing sustainable development performance and expanding ESG policies, it will be possible to increase attractiveness for investors, especially in the industrial sector.

"Moreover, the positive growth trend shows that our industry is resilient because it is able to face difficulties, withstand shocks, by continuing to adapt," he added.